Question

When there are diminishing marginal returns to factors of production, the PPF is: A) a negatively sloped straight line B) bowed out from the origin C) caved in toward the origin D) a positively sloped straight line

Answer 1

Answer:

B) bowed out from the origin

Explanation:

The production possibility frontier is a curve that shows the two combinations of goods and services produced in an economy given its resources.

Diminishing marginal returns says that beyond a certain point, as more units of an input is added while other inputs remains fixed, output would be diminishing.

The bowed out curve shows that as input is increasing, output is decreasing.

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